Autumn Budget 28 October 2026

29 October 2026 • Battersea, Chelsea, Chiswick, Fulham, Hammersmith, HMRC, International Tax, Kensington, Knightsbridge, Mayfair, Personal Tax, Putney, South West London, Wandsworth, Warrener Stewart, Warrener Stewart Edinburgh, Warrener Stewart London

Chancellor John Healey’s first Budget focused on providing support for households and businesses facing ongoing cost-of-living pressures, while maintaining the government’s commitment to fiscal discipline. While there were no major headline-grabbing tax increases, a number of significant measures were announced that will affect individuals, landlords, investors and business owners over the coming years.

Below, we have summarised the key tax measures and changes announced in the Budget, together with several important reminders of previously announced changes that are now approaching implementation.

Significant points

• Personal tax allowances, thresholds and rates remain frozen until April 2031.
• New Pension Tax Allowance introduced to prevent individuals whose only income is the State Pension from paying income tax on that income.
• Savings and rental income tax rates will increase by 4% from April 2027.
• Planned restrictions on Cash ISAs have been scrapped, with the £20,000 allowance remaining unchanged.
• A new Founders’ Relief will be introduced from April 2027, applying a 10% Capital Gains Tax rate on qualifying gains up to £10 million.
• Business rates relief will increase for many high street businesses from April 2027.

Personal Income Tax

Rates and allowances

Personal allowances and income tax thresholds will remain frozen until April 2031. As earnings continue to increase, more taxpayers may find themselves paying tax at higher rates despite no formal increase in income tax rates.

Pension Tax Allowance

A new Pension Tax Allowance will be introduced from 2027/28 to ensure individuals whose only income is the State Pension do not face an income tax charge as pension payments increase above the personal allowance. The allowance will apply for the 2027/28, 2028/29 and 2029/30 tax years.

Savings and property income

The most significant personal tax announcement was the increase in tax rates applying to savings and rental income from April 2027.

The new rates will be:

• 24% for basic-rate taxpayers
• 44% for higher-rate taxpayers
• 49% for additional-rate taxpayers

This doubles the increase announced in the previous budget and is likely to have a notable impact on landlords and those with significant savings income.

Scottish Rates – 2027/28

The Scottish government can set its own income tax rates for Scottish taxpayers for non-savings, non-dividend income; from 2026/27, it can also set its own rates for property income. The Scottish Budget, which will confirm the rates for 2027/28, will take place on 3 December 2026.

Employees

Company cars and vans

The government has confirmed previously announced increases to company car benefit rates and extends the published rates to 2030/31. The benefit-in-kind rate for fully electric vehicles will increase gradually from 4% in 2026/27 to 10% by 2030/31.

Mileage allowances

After increasing from 45p to 55p per mile in April 2026, the higher mileage allowance rate will remain unchanged. However, the rate for business mileage above 10,000 miles will increase from 25p to 35p from April 2027.

Employee share schemes

Several changes have been announced to tax-advantaged share schemes from April 2027, including:

• The CSOP individual option limit will double to £120,000.
• The CSOP exercise period will increase to 15 years.
• EMI exercise windows following disqualifying events will increase to 180 days.

Payrolling benefits

Mandatory payrolling remains on track, with company cars, vans, fuel and medical benefits due to move into payroll first. Employers should ensure systems are prepared ahead of implementation.

National Insurance Contributions (NICs)

No major changes were announced to NIC rates or thresholds.

The Primary Threshold, Upper Earnings Limit and Employer Secondary Threshold remain frozen until April 2031. The Lower Earnings Limit, Small Profits Threshold and voluntary contribution rates will increase in line with inflation for 2027/28.

Savings and Pensions

ISAs

The government has abandoned plans to restrict Cash ISA subscriptions to £12,000 from April 2027.

Individuals will continue to be able to invest up to the full £20,000 annual ISA allowance in cash, stocks and shares, or a combination of the two.

Lifetime ISAs

From 29 October 2026, the withdrawal charge on Lifetime ISA funds used for house purchases above the £450,000 limit will reduce from 25% to 20%.

Pension contributions

No changes were announced to pension contribution tax relief or pension withdrawal rules. Previously announced restrictions on salary sacrifice arrangements from April 2029 remain unchanged.

Capital Gains Tax

Business Asset Disposal Relief

The 18% tax rate will remain unchanged, but the lifetime qualifying gains limit will be reduced from £1 million to £500,000 for disposals made from 6 April 2027.

Founder’s Relief

A new Founder’s relief will be introduced from April 2027.

The relief will provide a Capital Gains Tax rate of 10% on qualifying disposals, subject to a lifetime limit of £10 million. Full details will be published following consultation.

Inheritance Tax

The nil-rate band remains frozen at £325,000 until April 2031.

The Budget also confirmed that unused pension funds will generally become subject to Inheritance Tax from 6 April 2027, whether or not they are held in trust arrangements. This may require affected individuals to revisit their estate planning arrangements.

Business Tax

Capital allowances

Businesses investing in qualifying plant and machinery will benefit from an increase in the First Year Allowance from 40% to 50% from January 2027.

However, from April 2027, the main writing-down allowance will reduce from 14% to 12%, slowing the rate at which tax relief is obtained on expenditure that does not qualify for upfront relief.

Zero-emission cars and electric vehicle chargepoints

The dedicated 100% First Year Allowances for qualifying new zero-emission cars and electric vehicle chargepoints will end from April 2027. Following this, most new electric cars will instead qualify for relief through standard writing-down allowances.

Trading allowance

The trading allowance for individuals will increase from £1,000 to £3,000 from April 2027.

Corporation Tax

Corporation tax rates remain unchanged, with:

• 25% main rate
• 19% small profits rate

However, the banking sector surcharge will temporarily increase from 3% to 6% for 15 months from January 2027 to help fund cost-of-living support measures.

Research & Development

The government will simplify the R&D claims process from April 2027 by removing the requirement for claim notification forms and introducing a revised Additional Information Form.

Value Added Tax

Registration threshold

No changes were announced to the VAT registration threshold, which remains at £90,000.

Electricity bills

The temporary zero rate of VAT on domestic electricity bills has been extended until 30 June 2027.

Online marketplaces

From October 2027, online marketplaces will become responsible for accounting for VAT on a wider range of transactions, including many sales made by UK businesses through those platforms.

Property Taxation

High-value residential property

The previously announced High Value Council Tax Surcharge remains on course for introduction from April 2028.

The surcharge will apply to residential properties in England valued at £2 million or more, with charges ranging from £2,500 to £7,500 depending on the property’s value.

Annual Tax on Enveloped Dwellings

ATED charges will increase broadly in line with inflation for 2027/28.

Other Measures

Making Tax Digital

Making Tax Digital for Income Tax will expand from April 2027 to include self-employed individuals and landlords with qualifying income above £30,000.

Affected taxpayers will be required to maintain digital records, submit quarterly updates and use compatible software.

Fuel duty

The government has extended the existing fuel duty freeze and retained the 5p reduction beyond January 2027. Inflation-linked increases are not expected to resume until July 2027.

 

If you would like to discuss what these changes mean for you or your business, please speak to your usual Warrener Stewart contact or email info@warrenerstewart.com.